The great gas price shuffle

If you think gas is more expensive in some towns than others, you’re right. Efforts to end what’s known as “zone pricing” may help even out prices.

Robert Barlow and Margaret Poe, staff writers

On Tuesday, a gallon of gas at the Henrietta Kwik Fill was $3.57 — 32 cents cheaper per gallon than at the Kwik Fill on Route 332 in Canandaigua.

Judging by the long line of cars at Kwik Fill and other Henrietta gas stations, people have noticed this “zone pricing,” where petroleum companies set the price of gasoline based on the demographics of a certain area.

Ionia resident Larry Evans chalks it up to greed. Canandaigua stations will keep charging a higher price as long as people keep buying the gas, he said. And it’s not just one station, he noted.
“They must all be in cahoots,” Evans said.

They basically are, said state Sen. James Alesi, R-Perinton. But the wholesalers, not the individual stations, are to blame. In areas where competition is limited, wholesalers will charge a higher per-gallon tank price to retailers. Gas retailers who are charged more then pass those increased costs on to the consumers at the pump.

That scenario hasn’t gone unnoticed in Naples.

“They can pretty much do what they want with the gas prices in this town, because a lot of people don’t leave town, so they’ve got to pay for the gas prices,” said Philip Shenk outside the Kwik Fill on Main Street, where gas was selling at 3.99 a gallon this week.

Kimberly Perkins, who lives and works near Henrietta, has noticed the difference in price when she fills her SUV at various stations around Rochester.

“It’s ridiculous how much higher prices are in certain areas,” she said. “When I travel to Henrietta, and to wholesale clubs, the price drops about 40 cents a gallon.”

Alesi has noticed the same disparity — and wants to put a stop to it by ending zone pricing altogether.

“We’re continuing to see sky-high prices for gasoline,” said Alesi. “One of the underlying contributors to the high gas prices, especially in upstate New York, is that the oil companies know that through ‘zone pricing’ they can target certain areas where people are more apt to pay higher prices for gasoline.”

The state Legislature has approved a bill, sponsored by Alesi, to prohibit petroleum companies from using zone pricing. If signed by Gov. Paterson, the fine for any company practicing zone pricing could be up to $10,000.

The state gas dealers association supports the bill, although it says zone pricing is used more often downstate than in the Rochester area.

“They basically squeeze as much money out of the market in geographical locations as they possibly can,” said spokesman Bill Adams. “They figure, it’s more affluent out here in the suburbs and that they be willing to pay more.”

But some stations aren’t waiting for legislative action. Near Ionia, where Evans lives, stations are taking steps to lure customers. A West Bloomfield station offers a nickel off per gallon on Sundays, he said, causing long lines to form. And now the station is offering the same discount for customers paying in cash, Evans said.

It’s “something they should have done a long time ago,” he said.

Messenger Post news partner WHEC-TV contributed to this story. Contact Robert Barlow at (585) 394-0770, ext. 320, or at rbarlow@messengerpostmedia.com.